If you're just starting your journey in crypto, you've probably encountered terms like market order, limit order, stop-limit, and others. It sounds a bit like a spell, but don't worry — we'll break it all down now 😉
1. Market Order — 🏃♂️ Order for speed
This is the simplest type of order. You just click 'Buy' or 'Sell', and the exchange executes this action at the best available market price.
When to use:
• When speed is more important than exact price.
• For example, the market is flying up, and you don't want to miss the movement 🚀
Minus: You might buy or sell slightly off the expected price. This is called slippage.
2. Limit Order — 🎯 Order for accuracy
Here you set the price at which you want to buy or sell. And the order will only be executed when the market reaches that price.
When to use:
• When you want to buy cheaper or sell higher.
• For example: you want to buy BTC at $60,000, but it's currently $62,000 — you set a limit buy and wait.
Plus: You definitely know the price.
Minus: The order may not be executed if the market doesn't reach your price.
3. Stop-Limit — 🛑🎯 Order for protection
This is a combo. First, the trigger price (stop) is activated, and then the limit order is activated.
When to use:
• To protect yourself from large losses.
• For example: you bought ETH at $3,000 and want to exit if it drops to $2,800. You set stop = 2,800, limit = 2,790. As soon as the market breaks $2,800 — the exchange places your sell order.
Plus: You can automatically stop losses.
Minus: If the market is moving quickly, your order may not have time to trigger.
4. OCO — 🎭 One Cancels the Other
OCO (One Cancels the Other) — is two orders in one: one limit, the other stop-limit. As soon as one is executed — the other is canceled.
When to use:
• If you want to take profit or stop loss, depending on which way the market goes.
• For example: BTC is currently $60,000
→ you set a sell limit at $65,000
→ and stop-limit at $58,000
— the first to trigger, the second will automatically disappear.
Now that you know how orders work — you can trade more confidently 💪
Comment below which type of order you use most often and why! ⤵️
#TradingCommunity #Binance #BinanceSquareFamily